OECD Responsible Minerals Forum: What to Expect from LBMA
It’s hard to talk about Paris in Spring without descending into clichés (both good and bad) about the City of Lights; but it’s safe to say that the buzz around this week’s OECD Forum on Responsible Mineral Supply Chains is bigger than that of the usual street-side apéritif.
Some of the giddiness may be attributed to the fact that it will be the first in-person Forum in three years — and an opportunity for us to catch up with close colleagues — but the line-up of speakers and topics undoubtedly has something to do with it as well.
With artisanal and small-scale mining (ASM) playing a prominent role on the agenda, LBMA’s executive team will be represented on several panels to discuss various aspects of our ASM initiative and how due diligence and transparency in the gold sector, most notably by refiners on our Good Delivery List (GDL), can be improved.
LBMA is co-hosting two partner session on each side of the official Forum dates (26 and 27 April), with the one set to kick things off first thing on Tuesday morning (25 April).
That session will examine the role of LBMA and RMI aligned intermediate refiners and aggregators in improving supply chain traceability and due diligence in Peru and Colombia.
As we have discussed before, there are several critical barriers to legitimate ASM production passing through legal supply chains, including an absence of legal domestic exporters, lack of volume in production or audit schemes that unintentionally include unattainable standards for ASM miners and traders. At the same time, from the midstream perspective, many medium sized gold refiners that do not have direct off-take agreements with large scale mines, also face barriers to traceability and transparency in their supply chains since gold sourced from ASM mines often passes through aggregators who melt the gold, thereby obscuring its origin and making due diligence efforts more difficult for GDL refiners.
This session will focus on case studies from Peru and Colombia to explore the role intermediate refiners and aggregators aligned to LBMA and RMI can play in improving sourcing practices closer to ASM mine sites, and support supply chain traceability and due diligence throughout the value chain.
In 2021, RMI published Researching the Role of Aggregators and Crude Refiners in the Gold Supply Chain and, based on the outcomes of the study, moved to extend its assessment beyond the fine refiner pinch point. Colombia was the first country in which RMI has piloted its approach to bring its OECD-aligned RMAP audit standard to aggregators and crude refiners. Maggie Gabos from RMI will be on the panel to discuss some of the key findings and recommendations of the report.
The Colombian and Peruvian examples serve as a template for LBMA’s ongoing efforts to create a framework by which GDL refiners can increase direct sourcing of ASM material. Representatives from Gold by Gold and PX Precinox will provide their insights into how they have developed their business model, the challenges they have faced, and how they intend to scale up their sourcing of ASM production, while also demonstrating supply chain traceability and due diligence.
The second session, in partnership with the World Gold Council, will tackle another element of our ASM initiative: how cooperation between LSM and ASM actors can improve sourcing practices and market access for ASGM.
In many ASM producing countries, legal or regulatory frameworks explicitly outlaw or discourage cooperation between large-scale miners and those working on nearby ASM concessions, or do not provide a legal framework for sub-contracting or for LSM operators to surrender areas of their concession for ASM “corridors”. In most situations LSM and ASGM are not in direct competition for the same sort of ore bodies; and, in some cases, it is possible with trust and goodwill to design co-existence arrangements — but these need to be facilitated by regulatory frameworks.
Increasingly, LSM miners are piloting or implementing initiatives that involve capacity building, supporting market access and due diligence for responsible ASM sources. Such co-existence is helped by the formalisation of ASGM. However, host governments often have problems in delivering on this because they lack administrative capacity or political will, or get the incentives wrong. This failure can deprive state treasuries of tax revenues, obscure due diligence efforts and contribute to illegality and possible social and political instability.
With this in mind, this session will explore the experiences and perspectives of leading mining companies that have forged cooperative relationships with ASM miners and cooperatives, and discuss the challenges and benefits in building such relationships. The discussion will be informed by case studies from efforts to build multistakeholder coalitions between government, LSM companies and ASM actors, in Cote d’Ivoire, Colombia and Ghana.
For those attending the Forum and looking to connect with LBMA, we hope you can join us for these sessions. In addition to the abovementioned sessions, LBMA will also be represented on the following panels:
Gold ASM, Due Diligence and certification: taking stock of achievements and challenges
25 Apr 2023 | 16:00 - 18:00
Partner session - Room MBS026
Gold, crime and conflict in West Africa: How can research shape action?
27 Apr 2023 | 18:00 - 19:00
Partner session – Auditorium
LBMA Responds to SwissAid Report
This week, LBMA responded to a recent report by SwissAid on African industrial gold.
In a letter to SwissAid, LBMA Chief Executive Ruth Crowell outlined how, since OECD's Due Diligence Guidance for Conflict Affected and High-Risk Areas (OECD Guidance) was launched in 2012, LBMA has been at the forefront of developing credible sourcing standards, through its Responsible Sourcing Programme (RSP) and improving transparency in the gold sector, most notably for refiners on its Good Delivery List (GDL).
LBMA’s RSP is part of a wider ecosystem, where responsibility is shared amongst all actors in the value chain to ensure that bullion is ethically sourced. Collaboration, intelligence-sharing, and consultation are crucial to ensuring the highest standards of responsible sourcing across the industry. We consider opportunities to engage with civil society groups such as SwissAid to be a critical part of that engagement.
While LBMA supports the report's overarching call for greater transparency, the report also contains a number of factual errors, which are addressed in the full letter and is available to read on the LBMA website.
Head of Responsible Sourcing, LBMA
Responsible Sourcing News
How Wagner plundered Sudan's gold. UnHerd
Transactions were being organised by Meroe Gold - a subsidiary of M-Invest, owned by Yevgeny Prigozhin, the leader of the Wagner Group. In return, Prigozhin provided training and arms for the Sudanese military and, increasingly, to Hemedti.
Ghana cited as major transit point for illicit gold trade - Report. My Joy
In its report on the global illicit economy, it was originally noted that "local gold refineries are being extensively used to launder gold from illicit sources in an artisanal mining sector involving several million people, force labor, and high risks."
Russia Lowers Gold Holdings In March 2023. Market Screener
Russia lowered gold holdings by 3.11 tonnes to 2,326.594 tonnes - IMF data.
India's ultra-high net-worth individuals allocated six per cent of their wealth towards gold in 2022: Report. The Economic Times
Second only to Austria, according to a survey by Knight Frank. In 2022, the average UHNWI wealth allocation in gold was 3% globally and 4% in the Asia Pacific region, the Knight Frank report said.
Is Saudi Arabia Selling Oil to China for Gold? Gainesville Coins
Rumours are making rounds that Saudi Arabia is selling oil for yuan, which it converts into gold on the Shanghai International Gold Exchange (SGEI). Such a development would make sense as large parts of the world want to de-dolarize.
Gold Heist at Canada's Biggest Airport Is Probed by Police. Bloomberg
Canada's national police force is investigating a heist at the country's busiest airport that may have netted thieves millions of dollars in gold and other valuables.